As unemployment continues to be a major issue affecting the South African economy, report has it that about 7000 South Africa’s wireline and wireless telecommunications provider Telkom workforce have been retrenched since 2013.
Telkom has during the year, said that its 3,878 employees accepted voluntary severance packages (VSPs) and voluntary early retirement packages (VERPs) and a more than 437 employees were affected by outsourcing.
Speaking at a presentation of the group’s results in Midrand, Telkom’s CEO, Mr Sipho Maseko pointed out that since 2013, the Telkom workforce has declined from 21,210, to 19,200 in 2014, to 18,330 in 2015, and to 13,770 in 2016.
The current number of the company’s headcount has even further reduced to approximately 12,500 and this results to lower expenses from 9.28 billion in 2013, to 7.91 billion in 2016.
“We have been mindful to retain key skills and attract new talent, especially scarce and business critical skills. Our investment in training and development is key to our efforts to transform our culture and ensure that we achieve our strategic objective of equipping our employees with the appropriate skills and experience to put our customers first in a very competitive ICT environment,” said Maseko.
Telkom’s job cuts are said to be part of a plan to reduce costs as consumers switch to data-enabled smartphones and tablets from landlines.
However, Maseko said he does not foresee any further reductions in Telkom workforce as the company has largely completed its turnaround strategy. “We have made sure that we have kept the right people,” he said.
Meawhile, Telkom rose the most this year as South Africa’s biggest landline provider. It announced its 15.5% increase in headline earnings for the year ended March 2016, while operating revenue climbed 13.9% to R37.3 billion
The company’s Normalized profit after tax reached R4 billion, compared to R3 billion for the previous period and the board declared a dividend of 270 cents, up 10% on the previous year’s total dividend.
The market responded to the results, with the company’s share price reaching nearly 9% during trade on Monday.
The financial highlight include:
- Group net revenue up 4% to R28 billion
- Normalized headline earnings per share (HEPS) increased by 15.5% to 658 cents
- Operating revenue up by 14% to R37 billion
- Normalized EBITDA increased by 16% to R11 billion
- Capital expenditure increased by about 17% to R6 billion
- Normalized free cash flow of almost R4 billion